Marriott International has about 90 properties closed in China due to the global spread of coronavirus but is already seeing positive signs of a return to normal. Marriott had 375 properties, with roughly 122,000 rooms, across Greater China at the end of 2019, representing 9% of its total global rooms. During the company’s earnings call, CEO Arne Sorenson cautioned that reopenings will be a slower process now.
Marriott is the world’s largest hotel operator with 800 properties in the Asia Pacific region and roughly half in Greater China. Travel restrictions enacted in the past three weeks to contain the virus have led to a sharp drop in occupancies across the mainland for a number of travel operators.
“I think it’s too soon to put much stock in this effort to reopen China because it’s early. But there is at least some hope, I suppose, that we’ve bottomed in China and maybe things will get a little bit better. This will pass, and when it does, the impact to our business will quickly fade,” said Arne Sorenson, CEO of Marriott International.
Marriott began to see the impact of the coronavirus on business in mid-January, he said, with occupancy declines gradually, spreading from Wuhan to other markets in the Asia-Pacific region. In February, RevPAR in Greater China declined almost 90%, versus the same period last year and in the Asia-Pacific region outside Greater China it declined roughly 25%, year-over-year. Marriott had 412 properties with 100,000 rooms at year-end 2019, representing 7% of its total worldwide rooms.
Sorenson said Marriott has not seen a significant impact on overall demand outside of the Asia-Pacific region, but “the situation obviously remains fluid.”
In regards to the comparison to SARS, Sorenson said if you go back to 2003, Chinese annual outbound travel would have been less than 10 million trips a year. Last year, meanwhile, it was closer to 150 million China trips, so “the relevance of China to the rest of the world is dramatically different.”
In other destinations affected by the coronavirus, Sorenson said South Korea and Italy will see both cancellations and declining RevPAR in those markets, though it’s still too early to tell.
